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UC regents propose 16 percent annual funding hike

Published: Friday, Sep. 16, 2011 - 12:00 am | Page 3A

University of California regents are debating a proposal to craft a four-year budget based on the assumption that UC needs 16 percent more money every year – a premise state budget analysts say is unrealistic.

"Stable" and "predictable" were frequently used words during Thursday's regents meeting in San Francisco, as university officials made the case for long-term financial security after several years of sharp swings in state funding and steep tuition increases that prompted massive student protests.

Knowing how much money UC will bring in over the next few years would allow the university to increase enrollment, fill vacant faculty positions, give employees raises and provide parents and students with a predictable tuition schedule, officials said.

"Without the assurance of stable funding, the university is hampered in many ways," said Executive Vice President Nathan Brostrom.

No one at the meeting raised the possibility that UC might not need to increase spending as much as it has proposed. That view, however, could be found in the Capitol, where budget analysts said they were frustrated by the regents' conversation.

"UC is in effect saying that it plans to spend hundreds of millions of dollars more each year … at a time that inflation is at historic lows, when demographic growth in the college-age population is near zero and when most public agencies are spending less money, rather than more money," Steve Boilard, director for higher education at the Legislative Analyst's Office, said in an email.

"I'm disappointed there wasn't a more robust conversation about these increases and what these spending increases entail," he said.

H.D. Palmer, spokesman for the state's Department of Finance, said the agency is in talks with UC about its request for four years of funding commitments but that no decisions have been made. He noted that the state is projecting budget shortfalls ranging from $1.6 billion to $3.1 billion for the next three years.

UC wants more money to close a budget gap projected at $2.5 billion over the next four years. Its current gap of $1 billion was caused in part by a state cut of $650 million. Another $100 million cut looms this winter if state revenue does not meet expectations.

The bulk of the projected budget gap comes from UC's desire to be an attractive place to work: $533 million in compensation costs, $396 million for retiree benefits and $114 million for other benefits. The rest includes: $170 million to increase enrollment, $100 million for building projects and $216 million for rising costs such as utilities.

Boilard, the state budget analyst, said he disagreed that UC must maintain quality by getting "into a bidding war with the most prestigious universities in the country."

"Every other sector of the government is looking at near-zero increases in salary, and a lot are still going in the negative direction. So I just question how necessary it is at this time to be going through a multiyear salary increase plan," he said.

UC Riverside Chancellor Timothy White described a different reality, saying 30 faculty members have left in recent years, lured away by other universities.

"We've lost them over dollars," White said.

Other UC branches not funded by the state also face salary pressure, as evidenced by the regents' approval Thursday of a $259,000 raise for Ann Madden Rice, chief executive officer of the UC Davis Medical Center.

Her compensation of $960,000 a year is paid by hospital fees, not state funds or student tuition. But the reason UC officials cited for the 37 percent raise was that Rice was being recruited by another academic hospital offering a salary of $1.5 million.

None of those specifics factored into the regents' discussion of a multiyear budget, however. They reviewed a proposal that calls for increasing funding by 16 percent a year for the next four years through a combination of tuition increases and state allocations, mostly by batting around ideas on where UC should and shouldn't turn for money.

Lt. Gov. Gavin Newsom argued against raising tuition. Superintendent of Public Instruction Tom Torlakson raised the possibility of a ballot initiative next year to fund education. Regent Bonnie Reiss said the university cannot count on generosity from the state Legislature.

Regent Richard Blum said UC should be more aggressive about soliciting corporate donations to fund scholarships for middle-class students.

"I have no faith in Sacramento to ever do the right thing," Blum said. "I've been watching this for 10 years it has essentially been a waste of our time to beat on governors and legislators. … Where is the money? It's in the private sector, with corporations and with wealthy individuals."

President Mark Yudof touted $500 million in efficiencies that UC is working to achieve but dismissed many cost-cutting options. Freezing vacant faculty positions, increasing class size, making it take longer for students to get their degrees or admitting more out-of-state students would not be "healthy for the University of California," he said.

© Copyright The Sacramento Bee. All rights reserved.


Call Laurel Rosenhall, Bee Capitol Bureau, (916) 321-1083. Follow her on Twitter, @LaurelRosenhall.

Read more articles by Laurel Rosenhall



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